ITC: The Yen’s Depreciation Appears Unusually Gentle

Odaily InTouch Capital Markets Senior FX Analyst Sean Callow stated that the most striking aspect of the yen's depreciation over the past few weeks is that the exchange rate movement has been quite stable and orderly. He added that the USD/JPY exchange rate is showing a mild upward trend, without the kind of sharp fluctuations typically used by Japanese authorities to justify currency market intervention. Callow pointed out that while falling oil prices should theoretically provide some support to the yen, interest rate factors remain the dominant force in the market. Strong U.S. economic data has reinforced market expectations for the Federal Reserve to raise interest rates this year; despite the Bank of Japan's action in June, 1% is not an attractive yield for a currency trading near 40-year lows against the dollar. (Jinshi)